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Southport Reporter® covering the news on Merseyside.

Date:- 03 April 2006

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IVA numbers rocket amongst the under 30s

DEBT problems amongst 20 to 30 year olds are getting worse by the month, but 40 to 50 year olds are getting their financial act together, according to new data compiled by personal insolvency specialists W3 Debt Solutions, part of the Begbies Traynor Group.

People in major financial difficulties can manage their finances by entering into an Individual Voluntary Arrangement (IVA), a legally binding arrangement that protects individuals in debt from creditors. IVAs allow interest to be frozen on debts, and repayments to creditors to be rescheduled to manageable levels.

According to W3’s data, just 13% of all of Britain’s IVAs were held by 20 to 30 year olds in October 2005. By February 2006, that figure had soared to 37% and looks set to keep on rising.  If the staggering upward trend continues, the 20 to 30 year olds could leapfrog the 30 to 40 year olds as the age group with the most IVAs.  In contrast, the proportion of total IVAs held by 40 to 50-year-olds plunged from a massive 42% in October last year to just 4% in February this year, a drop of a whopping 38%.

The 30 to 40 year olds consistently accounted for the most IVAs in each month between October 2005 and February 2006, but finished February on 41% of the total, just 4% ahead of the 20 to 30 year olds.

Greg Mullarkey, Chief Executive of W3 Debt Solutions, said:- “Too many younger people are living beyond their means. They might not worry now, but when they need a mortgage or affordable credit later in life, they will rue blowing too much on lifestyle choices such as holidays, clothes and cars, as well as too many good nights out.   Frankly, we were very surprised to see such a sharp fall in the number of people aged 40 to 50 taking out IVAs. I am concerned that people in this age range may be hiding their real problems by taking out expensive secured loans and remortgaging to pay their debts. Or it may just be a bit of a blip, and our next study in 6 months could tell a very different story.”


THE latest survey from Equifax, the instant online credit information provider, has examined consumer attitudes to savings and debt and reveals that 35% of people in the North West say they currently do not have a pension. And worryingly, 38% of residents in the North West also say that they don’t think they are paying enough into a pension for a comfortable retirement.

These figures confirm the growing pensions crisis the government is struggling to solve. “The pension crisis is a reality, with 38% of respondents across the UK not having a pension, including nearly a quarter of 41 to 50 year olds.  Although the number of people in the North West without a pension is lower than the national average, a staggering 38% of those who do have a pension don’t think they pay enough into it to enjoy a comfortable retirement, the highest in the country level with the Midlands. Add to this the fact that 25% of people in the North West who responded to the survey don’t have any savings and 27% say their debts outweigh their assets and it is a worrying picture indeed.” said Neil Munroe, External Affairs Director, Equifax.

Equifax’s survey supports reports that consumers are reluctant to invest money today in something that may not guarantee them a comfortable nest egg in old age. It seems that they need a degree of certainty before investing in a system that will provide for their future.

Neil then concluded that:- “Our survey reveals that 73% of people in the North West plan to increase their savings in 2006, slightly above the national average of 72%. IFA Promotion figures also state that one in ten consumers claim a pension is a priority for them this year.  One of the key findings from our survey highlights that people are still relying heavily on property value growth to support their debt as well as their pension. In the North West 62% have made no provisions, but 19% choose to invest in property. With 28% of people in the North West admitting to short term debts of over £5,000 it is difficult to see how a pension can become a reality for some.”

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